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EXHIBIT 10.2
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
MOUNTAINS WEST EXPLORATION, INC.,
MW Co,
SUPERIOR ENERGY LLC,
a Limited Liability Company
April 28, 2005
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TABLE OF CONTENTS
ARTICLE I
Definitions..............................................1
ARTICLE II Transactions; Terms of Merger;
Manner of Converting Shares..............................5
2.1
Merger.......................................................5
2.2 Time and Place of
Closing....................................5
2.3 Effective
Time...............................................5
2.4
Charter......................................................5
2.5
Bylaws.......................................................5
2.6 Directors and
Officers.......................................5
2.7 Conversion of
Shares.........................................5
2.8 Exchange of
Shares...........................................6
2.9 Rights of Former Superior
Stockholders.......................6
2.10 Legending of
Shares..........................................7
2.11 Fractional
Shares............................................7
2.12 Lost, Stolen or Destroyed
Certificates.......................7
ARTICLE III Representations and Warranties of MWEX, PURCHASER
and
THE MWEX Insiders.......................................7
3.1 Organization; Standing and
Power.............................7
3.2 Authorization;
Enforceability................................8
3.3 No Violation or
Conflict.....................................8
3.4 Consents of Governmental Authorities and
Others..............8
3.5 Conduct of
Business..........................................9
3.6
Litigation...................................................9
3.7
Brokers......................................................9
3.8
Compliance..................................................10
3.9 Charter, Bylaws and Corporate
Records.......................10
3.10 Subsidiaries and
Investments................................10
3.11
Capitalization..............................................10
3.12 Rights, Warrants,
Options...................................11
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3.13 Commission Filings and Financial
Statements.................11
3.14 Absence of Undisclosed
Liabilities..........................11
3.15 Real
Property...............................................11
3.16 List of Accounts and
Proxies................................12
3.17
Personnel...................................................12
3.18 Employment Agreements and Employee Benefit
Plans............12
3.19 Tax
Matters.................................................13
3.20 Material
Agreements.........................................13
3.21
Guaranties..................................................14
3.22 Environmental
Matters.......................................14
3.23 Absence of Certain Business
Practices.......................14
3.24
Disclosure..................................................15
ARTICLE IV Representations and Warranties of
Superior..............15
4.1
Organization................................................15
4.2 Authorization;
Enforceability...............................15
4.3 No Violation or
Conflict....................................16
4.4 Consents of Governmental Authorities and
Others.............16
4.5
Brokers.....................................................16
4.6 Charter, Bylaws and Corporate
Records.......................16
4.7 Subsidiaries and
Investments................................16
4.8
Capitalization..............................................16
4.9 Rights, Warrants,
Options...................................17
ARTICLE V Additional
Agreements...................................17
5.1 Survival of the Representations and
Warranties..............17
5.2
Investigation...............................................17
5.3
Indemnification.............................................17
5.4 Indemnity
Procedure.........................................18
5.5 General
Release.............................................19
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ARTICLE VI Closing; Deliveries; Conditions
Precedent...............19
6.1 Closing; Effective
Date.....................................19
6.2
Deliveries..................................................20
6.3 Conditions Precedent to the Obligations of
Superior.........21
6.4 Conditions Precedent to the Obligations of
MWEX.............23
6.5 Best
Efforts................................................23
6.6
Termination.................................................23
ARTICLE VII
Covenants...............................................24
7.1 General
Confidentiality.....................................24
7.2 Continuing
Obligations......................................25
7.3 Satisfaction of Certain Outstanding
Payables................25
7.4 Tax
Matters.................................................25
ARTICLE VIII
Miscellaneous...........................................25
8.1
Notices.....................................................25
8.2 Entire Agreement;
Incorporation.............................26
8.3 Binding
Effect..............................................27
8.4
Assignment..................................................27
8.5 Waiver and
Amendment........................................27
8.6 No Third Party
Beneficiary..................................27
8.7
Severability................................................27
8.8
Expenses....................................................27
8.9
Headings....................................................28
8.10 Other Remedies; Injunctive
Relief...........................28
8.11
Counterparts................................................28
8.12 Remedies
Exclusive..........................................28
8.13 Jurisdiction and
Venue......................................28
8.14 Participation of
Parties....................................28
8.15 Further
Assurances..........................................29
8.16
Publicity...................................................29
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of
April __,
2005, by and among Superior Energy LLC, a Delaware Limited
Liability Company
("Superior Energy LLC"); MOUNTAINS WEST EXPLORATION, INC., a New
Mexico
corporation ("MWEX"); MWEX (as defined in Article I) and MW Co,
a Colorado
corporation (the "Purchaser").
W I T N E S S E T H:
Preamble
The respective Boards of Directors of Superior, MWEX and
Purchaser are
of the opinion that the transactions described herein are in the
best interests
of the parties to this Agreement and their respective
stockholders. This
Agreement provides for the acquisition of Superior by MWEX
pursuant to the
merger of Purchaser with Superior. At the effective time of such
merger, the
outstanding shares of the capital stock of Superior shall be
converted into the
right to receive shares of the common stock of MWEX. As a
result, the
stockholders of Superior shall become stockholders of MWEX and
Superior shall
continue to conduct its business and operations as a wholly
owned subsidiary of
MWEX. The transactions described in this Agreement are subject
to the
satisfaction of certain other conditions described in this
Agreement. It is the
intention of the parties to this Agreement that the Merger for
federal income
tax purposes shall qualify as a "reorganization" within the
meaning of Section
368(a) of the Code.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth
herein, the
parties agree as follows:
ARTICLE I
Definitions
In addition to terms defined elsewhere in this Agreement, the
following
terms when used in this Agreement shall have the meanings
indicated below:
"Affiliate" shall mean with respect to a specified Person, any
other
Person which, directly or indirectly through one or more
intermediaries,
controls or is controlled by or is under common control with
such Person, and
without limiting the generality of the foregoing, includes, with
respect to a
Person (a) any other Person which beneficially owns or holds ten
percent (10%)
or more of any class of voting securities or other securities
convertible into
voting securities of such Person or beneficially owns or holds
ten percent (10%)
or more of any other equity interests in such Person, (b) any
other Person with
respect to which such Person beneficially owns or holds ten
percent (10%) or
more of any class of voting securities or other securities
convertible into
voting securities of such Person, or owns or holds ten percent
(10%) or more of
the equity interests of the other Person, and (c) any director
or senior officer
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of such Person. For purposes of this definition, the term
"control" (including,
with correlative meanings, the terms "controlled by" and "under
common control
with"), as used with respect to any Person, means the
possession, directly or
indirectly, of the power to direct or cause the direction of the
management and
policies of such Person, whether through the ownership of voting
securities or
by contract or otherwise.
"Agreement" shall mean this Agreement and Plan of Merger
together with all
exhibits and schedules referred to herein, which exhibits and
schedules are
incorporated herein and made a part hereof.
"Certificates" shall have the meaning set forth in Section
2.8.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall mean the date that the Closing takes
place.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commission" shall mean the United States Securities and
Exchange
Commission.
"Consideration Shares" shall have the meaning set forth in
Section 2.7(c).
"Effective Time" shall have the meaning set forth in Section
2.3.
"Employee Benefit Plans" shall have the meaning set forth in
Section 3.18.
"Environmental Laws" shall have the meaning set forth in Section
3.22.
"ERISA" shall have the meaning set forth in Section 3.18.
"Exchange Ratio" shall have the meaning set forth in Section
2.7(c).
"Financial Statements of MWEX" shall mean (i) the audited
balance sheet and
the audited statements of income, cash flow and retained
earnings of MWEX for
the twelve (12) month period ended December 31, 2004, and (ii)
the audited
balance sheet and the audited statements of income, cash flow
and retained
earnings of MWEX for the fiscal year ended July 31, 2004,
including in each such
case any related notes, each prepared according to GAAP
consistently applied
with prior periods, except as set forth on Schedule 3.13.
"GAAP" shall have the meaning set forth in Section 3.13.
"Guaranty" shall mean, as to any Person, all liabilities or
obligations of
such Person, with respect to any indebtedness or other
obligations of any other
Person, which have been guaranteed, directly or indirectly, in
any manner by
such Person, through an agreement, contingent or otherwise, to
purchase such
indebtedness or obligation, or to purchase or sell property or
services,
primarily for the purpose of enabling the debtor to make payment
of such
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indebtedness or obligation or to guarantee the payment to the
owner of such
indebtedness or obligation against loss, or to supply funds to
or in any manner
invest in the debtor.
"Indemnified Party" shall have the meaning set forth in Section
5.4.
"Indemnifying Party" shall have the meaning set forth in Section
5.4.
"Intellectual Property" shall mean the rights to any patent,
trademark,
copyright, service mark, invention, software, software code,
trade secret,
technology, product, composition, formula, method or
process.
"Investments" shall mean, with respect to any Person, all
advances, loans
or extensions of credit to any other Person (except for
extensions of credit to
customers in the ordinary course of business), all purchases or
commitments to
purchase any stock, bonds, notes, debentures or other securities
of any other
Person, and any other investment in any other Person, including
partnerships or
joint ventures (whether by capital contribution or otherwise) or
other similar
arrangement (whether written or oral) with any Person,
including, but not
limited to, arrangements in which (i) the first Person shares
profits and losses
of the other Person, (ii) any such other Person has the right to
obligate or
bind the first Person to any third party, or (iii) the first
Person may be
wholly or partially liable for the debts or obligations of such
partnership,
joint venture or other entity.
"Knowledge" shall mean, in the case of any Person who is an
individual,
knowledge that a reasonable individual under similar
circumstances would have
after such investigation and inquiry as such reasonable
individual would under
such similar circumstances make, and in the case of a Person
other than an
individual, the knowledge that a senior officer or director of
such Person, or
any other Person having responsibility for the particular
subject matter at
issue of such Person, would have after such investigation and
inquiry as such
senior officer, director or responsible Person would under such
similar
circumstances make.
"Law" and "Laws" shall have the meaning set forth in Section
3.19.
"Liabilities" shall have the meaning set forth in Section
3.14.
"Litigation" shall have the meaning set forth in Section
3.6.
"Material Adverse Effect" shall mean any event or condition of
any
character which has had or could reasonably be expected to have
a material
adverse effect on the condition (financial or otherwise),
results of operations,
assets, liabilities, properties, business or prospects of MWEX
or Superior, as
applicable.
"Material MWEX Agreements" shall have the meaning set forth in
Section
3.20.
"Merger" shall have the meaning set forth in Section 2.1.
"Merger Consideration" shall have the meaning set forth in
Section 2.7(c).
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"Outstanding MWEX Common Stock" shall have the meaning set forth
in Section
3.11.
"Outstanding Superior Interest" shall have the meaning set forth
in Section
4.8.
"Periodic Reports" shall have the meaning set forth in Section
3.13.
"Person" shall mean any natural person, corporation,
unincorporated
organization, partnership, association, limited liability
company, joint stock
company, joint venture, trust or government, or any agency or
political
subdivision of any government or any other entity.
"Purchaser" shall mean MW Co, a Colorado corporation.
"Purchaser Documents" shall have the meaning set forth in
Section 3.2.
"Superior" shall mean Superior Energy LLC, a Delaware Limited
Liability
Company.
"Superior Interest" shall have the meaning set forth in Section
4.8.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Subsidiary" of any Person shall mean any Person, whether or
not
capitalized, in which such Person owns, directly or indirectly,
an equity
interest of more than fifty percent (50%), or which may
effectively be
controlled, directly or indirectly, by such Person.
"Surviving Corporation" shall mean Superior as the surviving
corporation
resulting from the Merger with Purchaser
"Tax" and "Taxes" shall have the meaning set forth in Section
3.19.
"Tax Returns" shall have the meaning set forth in Section
3.19.
"MWEX" shall mean Mountain West Exploration, Inc., a New
Mexico
corporation.
"MWEX Common Stock" shall mean the shares of common stock, no
par value per
share, of MWEX, as further described in Section 3.11.
"MWEX Insiders" shall mean Skye Blue Ventures LLC.
"MWEX Leased Property" shall have the meaning set forth in
Section 3.15.
"MWEX Leases" shall have the meaning set forth in Section
3.15.
"Transaction" shall have the meaning set forth in Section
2.1.
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The words "hereof", "herein" and "hereunder" and the words of
similar
import shall refer to this Agreement as a whole and not to any
particular
provision of this Agreement. The terms defined in the singular
shall have a
comparable meaning when used in the plural and vice versa.
ARTICLE II
Transactions; Terms of Merger; Manner of Converting Shares
2.1 Merger. Subject to the terms and conditions of this
Agreement, at
the Effective Time, Purchaser shall be merged with Superior in
accordance with
the provisions of the Laws of the State of Colorado and Delaware
and with the
effect provided for therein (the "Merger"). As a result of the
Merger, the
separate corporate existence of Purchaser and Superior shall
cease and MW Co
shall be the Surviving Corporation resulting from the Merger
renamed Superior
Energy Co. and shall become a wholly owned Subsidiary of MWEX
and shall continue
to be governed by the laws of the State of Colorado. The Merger
shall be
consummated pursuant to the terms of this Agreement, which has
been approved and
adopted by the respective Boards of Directors of Superior,
Purchaser and MWEX,
by MWEX, as the sole stockholder of Purchaser, and by the
interest holders of
Superior Energy LLC. Superior shall convert from a limited
liability company at
or prior to closing to a corporation.
2.2 Time and Place of Closing. The closing of the
transactions
contemplated hereby (the "Closing") will take place at 10:00
A.M. on the date
that the Effective Time occurs or at such other time as the
parties, acting
through their authorized officers, may mutually agree. The
Closing shall be held
at the offices of Michael A. Littman, 7609 Ralston Road, Arvada,
CO 80002, or at
such other location as may be mutually agreed upon by the
parties.
2.3 Effective Time. The Merger and other transactions
contemplated by
this Agreement shall become effective on the date and at the
time the
Certificate of Merger reflecting the Merger shall become
effective with the
Secretary of State of the States of Colorado and Delaware (the
"Effective
Time").
2.4 Charter. The Certificate of Incorporation of Superior in
effect
immediately prior to the Effective Time shall be the Certificate
of
Incorporation of the Surviving Corporation of the merging
corporation until duly
amended or repealed.
2.5 Bylaws. The Bylaws of Superior in effect immediately prior
to the
Effective Time shall be the Bylaws of the Surviving Corporation
until duly
amended or repealed.
2.6 Directors and Officers. The directors of Superior in
office
immediately prior to the Effective Time, together with such
additional Persons
as may thereafter be elected, shall serve as the directors of
the Surviving
Corporation from and after the Effective Time in accordance with
the Bylaws of
the Surviving Corporation. The officers of Superior in office
immediately prior
to the Effective Time, together with such additional Persons as
may thereafter
be elected, shall serve as the officers of the Surviving
Corporation from and
after the Effective Time in accordance with the Bylaws of the
Surviving
Corporation.
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2.7 Conversion of Shares. Subject to the provisions of this
Article II,
at the Effective Time, by virtue of the Merger and without any
action on the
part of MWEX, Superior or Purchaser or the stockholders of any
of the foregoing,
the shares of the constituent corporations shall be converted as
follows:
(a) Each share of capital stock of MWEX issued and
outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from
and after the Effective Time.
(b) Each share of Purchaser's Common Stock issued and
outstanding immediately prior to the Effective Time shall cease
to be
outstanding and shall be converted into one share of Common
Stock of the
Surviving Corporation.
(c) Each share of Superior's Common Stock issued and
outstanding immediately prior to the Effective Time shall cease
to be
outstanding and shall be converted into and exchanged for the
right to receive
18,000,000 shares of Common Stock of MWEX, as adjusted to
reflect fully the
effect of any stock split, reverse stock split, stock dividend
(including any
dividend or distribution of securities convertible into common
stock of MWEX),
as the case may be, occurring after the date hereof and prior to
the Effective
Date (the "Exchange Ratio") (hereinafter such MWEX shares shall
be referred to
as the "Consideration Shares" or the "Merger Consideration").
The Consideration
Shares shall, upon issuance and delivery to the stockholders of
Superior in
accordance with the terms hereof, be fully paid, validly issued
and
non-assessable, but shall not be registered securities under the
Securities Act
of 1933, as amended, (the "Securities Act") pursuant to a valid
exemption
thereunder.
2.8 Exchange of Shares. At the Closing, the stockholders of
Superior
shall surrender each certificate or certificates which
represented shares of
Superior's Common Stock immediately prior to the Effective Time
(the
"Certificates") and shall promptly upon surrender thereof
receive in exchange
therefor the number of whole Consideration Shares issuable in
respect of all
shares of Superior's Common Stock held by such Superior
stockholder (rounded to
the nearest share). MWEX shall not be obligated to deliver the
consideration to
which a Superior stockholder is entitled as a result of the
Merger until such
Person surrenders its Certificate or Certificates for exchange
as provided in
this Section 2.8. Any other provision of this Agreement
notwithstanding, neither
MWEX nor the Surviving Corporation shall be liable to a holder
of Superior's
Common Stock for any amounts paid or property delivered in good
faith to a
public official pursuant to any applicable abandoned property,
escheat or
similar law.
2.9 Rights of Former Superior Stockholders. At the Effective
Time, the
stock transfer books of Superior shall be closed as to holders
of Superior
Common Stock immediately prior to the Effective Time and no
transfer of Superior
Common Stock by any such holder shall thereafter be made or
recognized. Until
surrendered for exchange in accordance with the provisions of
Section 2.8, each
Certificate theretofore representing shares of Superior Common
Stock shall from
and after the Effective Time represent for all purposes only the
right to
receive the consideration provided in Section 2.7 in exchange
therefor. Whenever
a dividend or other distribution is declared by MWEX on the MWEX
Common Stock,
the record date for which is at or after the Effective Time, the
declaration
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shall include dividends or other distributions on all shares of
MWEX Common
Stock issuable pursuant to this Agreement, but no dividend or
other distribution
payable to the holders of record of MWEX Common Stock as of any
time subsequent
to the Effective Time shall be delivered to the holder of any
Certificate until
such holder surrenders such Certificate for exchange as provided
in Section 2.8.
However, upon surrender of such Certificate, both the MWEX
Common Stock
certificate (together with all such undelivered dividends or
other distributions
without interest) and any undelivered dividends payable in
respect thereof
(without interest) shall be delivered and paid with respect to
each share
represented by such Certificate.
2.10 Legending of Securities. Each certificate for MWEX Common
Stock to
be issued to the Superior stockholders as part of the Merger
Consideration shall
bear substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF 1933, OR ANY STATE SECURITIES LAWS.
THESE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD,
ASSIGNED,
TRANSFERRED, PLEDGED. OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR LAWS, OR AN OPINION OF
COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT, IN
THE CIRCUMSTANCES,
REQUIRED UNDER SAID ACT".
2.11 Fractional Shares. Notwithstanding any other provision of
this
Agreement, if the Sellers would otherwise have been entitled to
receive a
fraction of a share of MWEX Common Stock (after taking into
account all
certificates delivered by the Superior stockholders), the number
of shares
issuable to the Superior stockholder shall be rounded up to the
next whole
number.
2.12 Lost, Stolen or Destroyed Certificates. In the event that
any
Certificates shall have been lost, stolen or destroyed, upon the
making of an
affidavit of that fact by such Superior stockholder (setting
forth the number of
shares of Superior Common Stock represented by such lost, stolen
or destroyed
Certificates), MWEX shall pay such Superior stockholder the
Consideration Shares
to which such Superior stockholder is entitled.
ARTICLE III
Representations and Warranties of MWEX, Purchaser and the MWEX
Insiders
In order to induce Superior to enter into this Agreement and
to
consummate the transactions contemplated hereby, MWEX,
Purchaser, and the MWEX
Insiders (as defined in Article I above), jointly and severally,
make the
representations and warranties set forth below to Superior.
3.1 Organization; Standing and Power. MWEX is a corporation
duly
organized, validly existing and in good standing under the laws
of the State of
New Mexico. Purchaser is a corporation duly organized, validly
existing and in
good standing under the laws of the State of Delaware. MWEX,
Purchaser and each
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of the MWEX Insiders has all requisite right, power and
authority to execute,
deliver and perform this Agreement and to consummate the
transactions
contemplated hereby. MWEX and Purchaser have all corporate
right, power and
authority to own or lease and operate their properties, and to
conduct their
business as presently conducted. MWEX and Purchaser are duly
qualified to
transact business as a foreign corporation in all jurisdictions
where the
ownership or leasing of their properties or the conduct of its
business requires
such qualification. Each jurisdiction in which MWEX and
Purchaser are so
qualified is listed on Schedule 3.1 hereto.
3.2 Authorization; Enforceability. The execution, delivery
and
performance of this Agreement by MWEX, Purchaser and the MWEX
Insiders and all
other agreements to be executed, delivered and performed by
MWEX, Purchaser and
the MWEX Insiders pursuant to this Agreement (collectively, the
"Purchaser
Documents") and the consummation by MWEX, Purchaser and the MWEX
Insiders of the
transactions contemplated hereby and thereby have been duly
authorized by all
requisite corporate or individual action on the part of MWEX,
Purchaser and the
MWEX Insiders, as applicable. This Agreement and the Purchaser
Documents have
been duly executed and delivered by MWEX, Purchaser and the MWEX
Insiders, and
constitute the legal, valid and binding obligation of MWEX,
Purchaser and the
MWEX Insiders, enforceable in accordance with their respective
terms, except to
the extent that their enforcement is limited by bankruptcy,
insolvency,
reorganization or other laws relating to or affecting the
enforcement of
creditors' rights generally and by general principles of
equity.
3.3 No Violation or Conflict. The execution, delivery and
performance
of this Agreement and the Purchaser Documents by MWEX, Purchaser
and the MWEX
Insiders, and the consummation by MWEX, Purchaser and the MWEX
Insiders of the
transactions contemplated hereby and thereby: (a) do not violate
or conflict
with any provision of law or regulation (whether federal, state
or local), or
any writ, order or decree of any court or governmental or
regulatory authority,
or any provision of MWEX or Purchaser's Articles or Certificate
of Incorporation
or Bylaws; and (b) do not and will not, with or without the
passage of time or
the giving of notice, result in the breach of, or constitute a
default (or an
event that with notice or lapse of time or both would become a
default), cause
the acceleration of performance, give to others any right of
termination,
amendment, acceleration or cancellation of or require any
consent under, or
result in the creation of any lien, charge or encumbrance upon
any property or
assets of MWEX or Purchaser pursuant to any instrument or
agreement to which
MWEX or Purchaser is a party or by which MWEX or Purchaser or
their respective
properties may be bound or affected, other than instruments or
agreements as to
which consent shall have been obtained at or prior to the
Closing, each of which
instruments or agreements is listed in Schedule 3.3 hereto.
3.4 Consents of Governmental Authorities and Others. No
consent,
approval, order or authorization of, or registration,
declaration, qualification
or filing with any federal, state or local governmental or
regulatory authority,
or any other Person, is required to be made by MWEX, Purchaser
or the MWEX
Insiders in connection with the execution, delivery or
performance of this
Agreement by MWEX, Purchaser and the MWEX Insiders or the
consummation by MWEX,
Purchaser and the MWEX Insiders of the transactions contemplated
hereby.
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3.5 Conduct of Business. Except as disclosed on Schedule 3.5
hereto,
since December 31, 2004, MWEX has conducted its businesses in
the ordinary and
usual course consistent with past practices and there has not
occurred any
adverse change in the condition (financial or otherwise),
results of operations,
properties, assets, liabilities, business or prospects of MWEX,
and no such
change is threatened. Without limiting the generality of the
foregoing, except
as disclosed on Schedule 3.6, since December 31, 2004, MWEX has
not: (a) amended
its Articles of Incorporation or Bylaws except as to a reverse
split of one for
50 and authorization of a name change ; (b) issued, sold or
authorized for
issuance or sale, shares of any class of its securities
(including, but not
limited to, by way of stock split or dividend) or any
subscriptions, options,
warrants, rights or convertible securities or entered into any
agreements or
commitments of any character obligating it to issue or sell any
such securities;
(c) redeemed, purchased or otherwise acquired, directly or
indirectly, any
shares of its capital stock or any option, warrant or other
right to purchase or
acquire any such capital stock; (d) suffered any damage,
destruction or loss,
whether or not covered by insurance, which has had or could
reasonably be
expected to have a Material Adverse Effect on any of its
properties, assets,
business or prospects; (e) granted or made any mortgage or
pledge or subjected
itself or any of its properties or assets to any lien, charge or
encumbrance of
any kind; (f) made or committed to make any capital expenditures
in excess of
$10,000; (g) become subject to any Guaranty; (h) granted any
increase in the
compensation payable or to become payable to directors, officers
or employees
(including, without limitation, any such increase pursuant to
any severance
package, bonus, pension, profit-sharing or other plan or
commitment); (i)
entered into any agreement which would be a Material Agreement,
or amended or
terminated any existing Material Agreement; (j) been named as a
party in any
Litigation, or become the focus of any investigation by any
government or
regulatory agency or authority; (k) declared or paid any
dividend or other
distribution with respect to its capital stock; or (l)
experienced any other
event or condition of any character which has had or to MWEX's
or the MWEX
Insiders' Knowledge, could reasonably be expected to have a
Material Adverse
Effect on MWEX.
3.6 Litigation. There are no actions, suits, investigations,
claims or
proceedings ("Litigation") pending or, to the Knowledge of MWEX,
Purchaser or
any of the MWEX Insiders, threatened before any court or by or
before any
governmental or regulatory authority or arbitrator, (a)
affecting MWEX or
Purchaser (as plaintiff or defendant) or (b) against MWEX,
Purchaser or the MWEX
Insiders relating to MWEX's Common Stock or the transactions
contemplated by
this Agreement and there exist no facts or circumstances to the
Knowledge of
MWEX, Purchaser or the MWEX Insiders creating any reasonable
basis for the
institution of any Litigation against MWEX, Purchaser or the
MWEX Insiders
3.7 Brokers. None of MWEX, Purchaser nor the MWEX Insiders has
employed
any broker or finder, and none of them has incurred or will
incur, directly or
indirectly, any broker's, finder's, investment banking or
similar fees,
commissions or expenses in connection with the transactions
contemplated by this
Agreement or the Purchaser Documents.
3.8 Compliance. MWEX and Purchaser are in compliance with all
federal,
state, local and foreign laws, ordinances, regulations,
judgments, rulings,
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orders and other requirements applicable to MWEX and Purchaser
and their
respective assets and properties, including, without limitation,
those relating
to (a) the registration and sale of the MWEX Common Stock, (b)
the establishment
of a public trading market for the MWEX Common Stock, and (c)
the public trading
of the MWEX Common Stock. MWEX and Purchaser are not subject to
any judicial,
governmental or administrative inquiry, investigation, order,
judgment or
decree.
3.9 Charter, Bylaws and Corporate Records. A true, correct and
complete
copy of (a) the Articles of Incorporation of MWEX and Purchaser,
as amended and
in effect on the date hereof, (b) the Bylaws of MWEX and
Purchaser, as amended
and in effect on the date hereof, and (c) the minute books of
MWEX and Purchaser
(containing all corporate proceedings from the date of
incorporation) have been
furnished to Superior. Such minute books contain accurate
records of all
meetings and other corporate actions of the board of directors,
committees of
the board of directors, incorporators and shareholders of MWEX
and Purchaser
from the date of its incorporation to the date hereof which were
memorialized in
writing. No actions have been taken since the date of MWEX or
Purchaser's
incorporation that are not memorialized in writing.
3.10 Subsidiaries and Investments. Except as required by
this
Agreement, MWEX has no Subsidiaries or Investments. MWEX owns
one hundred
percent (100%) of the issued and outstanding capital stock of
the Subsidiary MW
Co.
3.11 Capitalization. The authorized capital stock of MWEX
consists of
50,000,000 shares of common stock, of which 1,000,000 shares are
issued and
outstanding (the "Outstanding MWEX Common Stock"). All shares of
Outstanding
MWEX Common Stock have been duly authorized, are validly issued
and outstanding,
and are fully paid and non-assessable. No securities issued by
MWEX from the
date of its incorporation to the date hereof were issued in
violation of any
statutory, contractual or common law preemptive rights. There
are no dividends
which have accrued or been declared but are unpaid on the
capital stock of MWEX.
All taxes required to be paid in connection with the issuance
and any transfers
of MWEX's capital stock have been paid. All permits or
authorizations required
to be obtained from or registrations required to be effected
with any Person in
connection with any and all issuances of securities of MWEX from
the date of
MWEX's incorporation to the date hereof have been obtained or
effected and all
securities of MWEX have been issued and are held in accordance
with the
provisions of all applicable securities or other laws. The
Outstanding MWEX
Common Stock constitutes one hundred percent (100%) of the
issued and
outstanding capital stock of MWEX. The Consideration Shares
shall, upon issuance
and delivery to the Superior stockholders in accordance with the
terms hereof,
be fully paid, validly issued and non-assessable, but shall not
be registered
securities under the Securities Act of 1933. There are no
registration rights
outstanding which relate to the Outstanding MWEX Common Stock
and, to the
Knowledge of MWEX and the MWEX Insiders, there are no voting
trusts, proxies or
other agreements or understandings with respect to any equity
security of any
class of MWEX or with respect to any equity security,
partnership interest or
similar ownership interest of any class of any of its
Subsidiaries.
3.12 Rights, Warrants, Options. There are no outstanding (a)
securities
or instruments convertible into or exercisable for any of the
capital stock or
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other equity interests of MWEX or Purchaser; (b) options,
warrants,
subscriptions, puts, calls, or other rights to acquire capital
stock or other
equity interests of MWEX or Purchaser; or (c) commitments,
agreements or
understandings of any kind, including employee benefit
arrangements, relating to
the issuance or repurchase by MWEX or Purchaser of any capital
stock or other
equity interests of MWEX or Purchaser, or any instruments
convertible or
exercisable for any such securities or any options, warrants or
rights to
acquire such securities.
3.13 Commission Filings and Financial Statements. All of the
Periodic
Reports of MWEX required to satisfy the information requirements
of Section 13
of the Exchange Act have been filed with the Commission, have
been true,
accurate and complete in all material respects and have been
filed in compliance
with the requirements of the Exchange Act. The Financial
Statements of MWEX: (a)
have been prepared in accordance with the books of account and
records of MWEX;
(b) fairly present, and are true, correct and complete
statements in all
material respects of MWEX's financial condition and the results
of its
operations at the dates and for the periods specified in those
statements; and
(c) have been prepared in accordance with United States
generally accepted
accounting principles ("GAAP") consistently applied with prior
periods.
3.14 Absence of Undisclosed Liabilities. Other than as disclosed
by the
Periodic Reports, the Financial Statements of MWEX or as
disclosed on Schedule
3.14, MWEX and Purchaser do not have any direct or indirect
indebtedness,
liability, claim, loss, damage, deficiency, obligation or
responsibility, known
or unknown, fixed or unfixed, choate or inchoate, liquidated or
unliquidated,
secured or unsecured, accrued, absolute, contingent or
otherwise, including,
without limitation, liabilities on account of taxes, other
governmental charges
or Litigation, whether or not of a kind required by GAAP to be
set forth on a
financial statement ("Liabilities"). Except as listed on
Schedule 3.14, MWEX and
Purchaser do not have any Liabilities other than Liabilities
fully and
adequately reflected in the Periodic Reports or the Financial
Statements of
MWEX. MWEX, Purchaser and the MWEX Insiders have no Knowledge of
any
circumstances, conditions, events or arrangements which may
hereafter give rise
to any Liabilities of MWEX or Purchaser, except as set forth on
Schedule 3.14.
3.15 Real Property and Mineral Leases. MWEX and Purchaser do not
own
any fee simple interest in real property. MWEX and Purchaser do
not lease,
sublease, or have any other contractual interest in any real
property other than
as set forth on Schedule 3.15. Schedule 3.15 sets forth the
street address of
each parcel of real property leased or subleased by MWEX or
Purchaser, or in
which MWEX or Purchaser has any other contractual interest
(collectively the
"MWEX Leased Property"). Attached hereto as Schedule 3.15 is a
summary list of
all of the lease, sublease and other contractual agreements
(collectively the
"MWEX Leases"), as amended to date, relating to the MWEX Mineral
Leases. The
MWEX Leases are valid, binding and in full force and effect, all
rent and other
sums and charges payable thereunder are current, and no notice
of default or
termination under any of the MWEX Leases is outstanding.
RAD Enterprises, Inc. has entered into a Purchase Agreement to
purchase
such leases for the assumption of approximately $100,000 in
operating cost
assessments. There are potential liabilities (in addition to
operating charges)
associated with the MWEX Leases. There is no known any liability
under any
Environmental Law or regulation, which
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